Gold futures experienced a significant pullback, dropping approximately $50 per ounce from the previous day's record high. Despite this decline, gold prices have increased by nearly 4% this month. The dip is primarily attributed to the uncertainty surrounding the U.S. presidential election, which has spurred demand for safe-haven assets.
David Meger, head of metals at High Ridge Futures, noted that consolidation is expected as significant events, such as the U.S. election and the Federal Reserve meeting, loom next week. This anticipation has led some traders to lock in profits. Recent U.S. data showed that the annualized inflation rate remained close to the Federal Reserve's 2% target, even as monthly price increases were reported. Investors are now focusing on upcoming employment data that will inform the Fed's policy meeting decisions.
By the close of trading, nearby Comex gold futures had fallen 1.8% to $2738.30 per ounce, marking the largest single-day dollar and percentage decrease since July 25. Despite the drop, it remains the sixth-highest closing price this year. Silver futures also declined, closing down 3.7% at $32.653 per ounce. Gold's 3.9% rise in October represents its eighth consecutive monthly gain, the longest streak on record, while silver climbed 4.8% for the month.
Peter Spina, president and founder of GoldSeek.com, remarked that Thursday's gold price retreat could be a minor correction in a robust uptrend or the start of a more extended consolidation phase. A myriad of factors, including the ongoing accumulation of U.S. deficits and increasing debt payment obligations, could influence gold prices. The uncertainty of next week's election continues to draw safe-haven buyers, with neither major political party addressing the trillion-dollar deficit issue.
On Thursday, gold-related stocks retreated, with Barrick Gold (GOLD, Financial), Kinross Gold (KGC), and Gold Fields (GFI) each dropping nearly 4%. Newmont Mining (NEM) fell over 3%, and Agnico Eagle Mines (AEM) saw a decline of more than 2%.
